Copyright
Joseph F. (Joseph Fitz) Randolph.

A treatise on the law of commercial paper; containing a full statement of existing American and foreign statutes, together with the text of the Commercial codes of Great Britain, France, Germany and Spain (Volume 1) online

. (page 121 of 125)
Online LibraryJoseph F. (Joseph Fitz) RandolphA treatise on the law of commercial paper; containing a full statement of existing American and foreign statutes, together with the text of the Commercial codes of Great Britain, France, Germany and Spain (Volume 1) → online text (page 121 of 125)
Font size
QR-code for this ebook


89 See §§ 545, 450, et seq., supra.

100 Lothrop V. Snell, 11 Cush. (Mass.) 453; Lynch v. Baxter, 4 Tex. 431.

101 Nichols V. Hill. 32 Tex. 51G.

102 ronioroy v. Burnett, 8 Blackf. (Ind.) 142.
(882)



Ch. 15) FAILUUK OF TITLE. § 547

clause in the contract providing for re-entry at the vendor's option
on nonpayment of tlie note constitutes no failure of considera-
tion for tlie note without an actual re-entry.^ °^

In apparent opposition to the authorities above cited, it has been
held in a recent case in North Carolina that the rule of caveat emp-
tor applies to such cases, and that, where a note is given for land,
the want of title to the land is no defense in the absence of fraud.^°*
And it is said that the buyer must rescind the contract in order to
avail himself of a defense arising out of a want of title.^°^ And.
where a note is given for land purchased, the contract providing
'for a warranty deed to be given, the pendency of a suit against the
title, known at the time to the maker of the note, is no bar to a
suit on the note; and such action can be brought without waiting
for the termination of the earlier suit as to the title.^°°

A distinction has been made, as already seen, in some cases, be-
tween transfers of land with a warranty by an insolvent grantor
and like transfers where the grantor is solvent. In the former case
want of title has been held to constitute a failure of considera-
tion.^" In the latter case it has been held that the purchaser
must seek his remedy by an action on his covenants.^"^ This dis-
tinction, however, does not seem to be supported by the weight of
authority in the cases already cited. It has also been held that,
where a note is given by A. for land conveyed to B., the want of
title can only be set up in defense between the parties to the
deed.^°® And in Texas, it seems, that failure for want of, title to the
land sold must be specially pleaded, with an averment either of
want of title or of an eviction.^ ^**

103 Chandler v. Marsh, 3 Vt. 102.

104 Foy V. Ilaughton, 85 N. C. 168.

108 Wade v. Killouffh, 3 Stew. & P. (Ala.) 431.

106 Baldridge v. Cook, 27 Tex. 505.

107 Knapp V. Lee, 3 Pick. (^lass.) 452.

108 Guice V. Sellers, 43 Miss. 52.

109 Bass V. Randall, 1 Minn. 404 (Gil. 292).

110 Tooke V. Bonds, 29 Tex. 419.

(883)



§ 548 CO.NsIDEKATiO-N — FAILURE. (Cll. 15



Failure by Fraudulent Warranty.

§ 548. Where a note is given for goods fraudulently warranted,
and the goods are afterwards returned and the contract rescind-
ed, there is plainly a failure of the consideration. ^^^ But, in gen-
eral, either a warranty or a false representation is necessary to
constitute a failure by reason of defect in the value or quality of
the goods sold.^^^ And in Indiana, it seems, such failure must be
specially pleaded with an averment of warranty or fraud.^^^

It has been stated as the common-law rule that, although goods
are sold with a warranty, the breach of warranty constitutes no
failure of the consideration of a note given for the goods, unless
they are entirely worthless.^ ^* In the United States, however, a
breach of warranty amounting to a partial failure has been held
to be a good defense pro tanto.^^^ And if the property is totally
worthless, it is a total failure.^ ^^ And where goods sold have been
warranted for a particular purpose, and are worthless for that pur-
pose, there is a failure of the consideration, although the property

111 Chit. Bills. 94; 1 Pars. Notes & B. 205; Lewis v. Cosgrave, 2 Taunt. 2;
Solomon v. Turner, 1 Starkie, 51.

112 Reed V. Prentiss, 1 N. H. 174; Richards v. Betzer, 53 111. 466; Detrick
V. McGlone, 46 Ind. 291; Bryant v. Pember, 45 Vt. 487; Buhrman v. Baylis,
14 Hun (N. Y.) 608. See § 541, supra. Breach of warranty of soundness is
a sufficient failure. Matlock v. Gibson, 8 Rich. Law (S. C.) 437. So, that an
insurance company, for insurance in which the note was given, had no real
capital. Terry v. Hickman, 1 Mo. App. 119.

113 Myers v. Conway, 62 Ind. 474.

114 1 Pars. Notes & B. 204. So stated by Judge Daniel also as the rule in
England and in many of the states. 1 Daniel, Neg. Inst. 206.

115 Payne v. Cutler, 13 Wend. (N. Y.) 605; Butler v. Titus, 13 Wis. 429;
Stockton Savings & Loan Soc. v. Giddings, 96 Cal. 84, 30 Pac. 1016;
Beers v. Williams, 16 111. 69; Rugland v. Thompson, 48 Minn. 539, 51 N. W.
604. But, to the effect that the warranty must be expressed in the note, see
Reed V. Wood, 9 Vt. 285. And the warranty may be waived by an express
agreement to make the article good before the note is paid. Kelso v. Frye,
4 Bibb (Ky.) 493.

lie Slater v, Foster, 62 Minn. 150, 64 N. W. 160; Cochrane v. Jones, 85 Ga.
678, 11 S. E. 811; McCormick Harvesting Mach. Co. v. Gray, 100 Ind. 285.
But not where the maker has failed in his own performance of the condi-
tions. Worden v. Harvester Co., 11 Neb. 116, 7 N. W. 756.
(884)



Ch. 15) FAILURE BY FRAUDULENT WARRANTY. § 548

may have a value for other purposes.^^'^ So, where a slave is war-
ranted sound and is returned within a reasonable time for unsound-
ness, this is sufficient defense to a note given for it without proof
of an immediate return of the slave.^^^ But, where a breach of
warranty is held to be a good legal defense by way of failure of
consideration, an injunction will not be granted in equity to re-
strain the transfer of the note.^^'^

A note given for a worthless patent, which is warranted, is sub-
ject to defense for the worthlessness of the patent and the breach
of warranty.^^*^ And, notwithstanding the covenant of warranty,
such worthlessness is a defense.^^^ So, it is a good defense that
the patent warranted is bad for want of originality, although not
repealed; ^^^ or that a machine, warranted as to its quality, is
not as warranted; ^^^ especially where there is an agreement for
refunding the money if it does not work as warranted.^ ^* So,
where a note is given for a hedge warranted for five years, and the
hedge dies within that time, there is a failure of consideration.^-^
But where a note is given for goods sold, with a warranty to the
maker of the note, an accommodation indorser cannot set up the

117 Starr v. Torrey. 22 N. J. Law, 190.

lis Clements v. Smith's Adm'rs, 9 Gill (Md.) 156. See, too, as to such
breach of warranty constituting a defense between the original parties to
the note, Dancey v. Sugg, 46 Miss. GOG. See § 451, supra.

ii» McMillion v. Pigg, 3 Stew. (Ala.) 1G5.

12 Johnson v. McCabe, 37 Ind. 535.

121 Dickinson v. Hall, 14 Pick. (Mass.) 217. And a failure of considera-
tion of this sort is not waived by making a payment on account after receiv-
ing notice of the defect in the goods. Atkins v. Cobb, 5G Ga. 86. But such
worthlessness of goods sold with a warranty constitutes no failure in the ac-
ceptance of a bill of exchange drawn by the buyer on a third person. Marsh
V, Low, 55 Ind. 271.

122 Parrot v. Farnsworth, Brayt. (Vt.) 174.

123 Aldrich v. Stockwell, 9 Allen (Mass.) 45; Thompson v. Manufacturing
Co., 29 Kan. 476; Osborne v. McQueen, 67 Wis. 392, 29 N. W. 636; Beers v.
AYilliams, 16 111. 69. But a contemporaneous agreement of warranty has
been held in Iowa to constitute no defense to a negotiable note. Cook v.*
Weirman, 51 Iowa, 561, 2 N. W. 386.

124 Rumsey v. Sargent, 21 N. H. 309.

125 Edwards v. Pyle, 23 111. 354; Davis v. McVickers, 11 HI. 327. And, in
general, as to breach of warranty constituting a failure of consideration, see
Shepherd v. Temple, 3 N. H. 455.

(8S5)



§ 5i9 CONSIDERATION FAILURE. ' (Ch. 15

breach of warranty as a defense.^-® Where, however, a note is
given for a machine sold with a warranty, and the machine is re-
turned as useless, and accei^ted by the seller, the consideration for
the note fails, even though the machine answers fully the purpose
for which it was warranted.^ ^^



Unsoundness ■w^ithout Fraud — False Representations.

§ 549. On the other hand, if there be no fraud in the warranty
and no return of the property, the unsoundness constituting a
breach of the warranty can only be availed of in an action on the
covenant, and not by way of defense to the note.^^^ And it has
been held that the settling and stating of an account estops the
maker of a note given for a balance due on a contract from set-
ting up a failure of consideration by reason of breach of warran-
^y 129 p^y^ ^^Q mere giving of a renewal note is not of itself con-
clusive evidence of a waiver on the maker's part of a defense found-
ed on a breach of warranty in the sale of the property for which
the original note was given. ^^^

Ao;ain, where a note is given for the purchase of property, fraud-
ulent representations as to it constitute a failure of considera-
tion; ^^^ especially if the sale be rescinded on account of the fraud
and the goods returned.^^^ So, the worthlessness of a patent and

12G Hiner v. Newton, 30 Wis. G40.

127 Manuy v. Glendinning, 15 Wis. 50.

128 Thornton v. Wynn, 12 Wheat. 1S3. But see, contra, Harrington v.
Stratton, 22 Pick. (Mass.) 510.

129 Colby V. Lyman, 4 Neb. 429.

i3 0Aultman v. W^heeler. 49 Iowa, 647.

131 Mills V. Oddy, 2 Crorap. M. & R. 103, 5 Tyrw. 571; Beall v. Pearre,
12 Md. 550. So, a material misrepresentation as to improvements, Hodges v.
Torrey, 28 Mo. 00; or liability to flooding, Jones v. Hathaway, 77 Ind. 14.
But fraudulent misrepresentation in the sale of goods without a warranty
has been held not to amount to failure of consideration of the note given for
them. Piaines v. Dooley, 23 Ark. 329. See, however, as to a note for the
endowment of a scholarship, Elsass v. Institute, 77 Ind. 72. And a fraudu-
lent representation as to past dividends on stock purchased is said to be an
equitable defense, and to be available in an action on the note by way of
counterclaim, rather than as a partial failure of consideration. Boggs v.
Wann, 58 Fed. 681.

182 Beckner v. Willson. GS Ind. 533.
(886)



Ch. 1-5) FAILURK BY MISTAKE. § OoO

fraudulent representations as to it constitute good defense to a
note given for it witliout a return or retransfer.^^^ But not a
mere partial failure by reason of the patent being less valuable
than was represented, the loss of value not being ascertainable by
computation.^^*

Again, if a note is given for property purchased by sample, the
failure of the property to correspond with the sample constitutes
a total failure of consideration.^ ^^ And, if a bill accepted for such
sale be paid by the acceptor, he may recover the amount paid
against the drawer. ^^'^ Where a note has been given for the pur-
chase of property at cost price, and this has been misrepresented,
it is said that fraud in the sale and an offer to rescind are nec-
essary to constitute a failure of consideration, and also that the
amount be capable of computation. ^^^

On the other hand, where a note is given for a debt of the maker
on a false representation that the amount was due, there being
nothing due, there is a failure of consideration.^ ^^ So, where goods
have been sold with a fraudulent warranty, and their full value
has been already paid, a bill given by the purchaser for the bal-
ance is without consideration, and the drawer cannot be held.^^*

Failure by Mistake.

§ 550. Sometimes the failure of consideration is due to a mis-
take, e. g. where a note is given in diseharge of a supposed lia-

i33Beocker v. Yrooman, 1.3 Johns. (N. Y.) o02; Spalding v. Vaudercook, 2
Wond. (N. Y.) 432; Whitney v. Allaire, 4 Denio (N. Y.) 554; Franlclin v.
Long, 7 Gill & J. (Md.) 419; Groff v. Hansel, 33 Md. 161.

134 Pulsifer v. Hotchldss, 12 Conn. 233.

135 Wells V. Hoplvins, 5 Mees. & W. 7, 3 Jur. 797. But see. as to representa-
tions on the information of another without profession of personal knowl-
edge, Davidson v. Jordan, 47 Cal. 351.

136 Hooper v. Treffry, 1 Exch. 17.

137 Harrington v. Lee, 33 Vt. 249. before the present statute.

138 Southall v. Kigg. 11 C. B. 4S1. So, on a false representation as to serv-
ices rendered, Andros v. Childers, 14 Or. 447, 13 Pac. Go.

139 Archer v. Bamford, 3 Starkie, 175. So, where the false warranty re-
lated to the quantity of land sold, Still v. Snow, GC Vt. 277, 29 Atl. 250; or
as to annual sales of a business sold, Rawson v. Pratt, 91 Ind. 9; or as to
the collateral security, Hacker v. Brown, SI Mo. GS; or as to the soundness of
a wall, Applegarth v. Robertson, Go Md. 493, 4 Atl. 89G.

(SS7)



;§ 551 CONSIDERATION FAILURE. (Ch. 15

bility; ^*° or in payment of an illegal assessment, the maker be-
ing ignorant of the illegality; ^*^ or, on dissolution of a partner-
ship, for the supposed value of the partnership accounts.^*^ A
mistake on the maker's part, to constitute a failure of considera-
tion, must not be a mistake of law,^*^ And, where a note has
been given to compromise a suit against the maker's title, it is no
defense that the suit could not have prevailed.^** So, where a note
is given for an award rendered, a legal objection to the award con-
stitutes no defense.^*^ If a note be given in compromise of a bas-
tardy proceeding, the maker cannot set up in defense that he could
afterwards prove he was not the father of the child. ^*^ But where
a note has been given in settlement of a charge of slandering the
payee's wife, with an agreement that it shall be canceled if the
charge be proved true, the falsity of the charge may be showm by
parol, as well as the agreement for canceling the note, not, how-
ever, it was held, as establishing a failure or want of considera-
tion, but as a payment of the note.^*^

Failure — Unperformed Agreement.

§ 551. Failure of consideration frequently consists in the non-
performance of an agreement for which the bill or note is given; ^*^

140 Haynes v. Thorn, 28 N. H. 386.

141 Maddy v. Turnpike Co., 57 Ind. 148; or for a threshing machine pro-
hibited by law, Wadleigh v. Develling, 1 111. App. 596.

142 Rogers V. Rogers, 1 Hall (N. Y.) 391, as an equitable defense only.

143 Carpentier v. Mintum, 6 Lans. (N. Y.) 56.

144 Billingsley v. Niblett, 56 Miss. 537.

145 Boynton v. Butterfield, 6 Allen (Mass.) 67.

146 Compton V. Davidson, 31 Ind. 62.

147 Sanders v. Howe, 1 D. Chip. (Vt). 363.

148 Watson v. Russell, 3 Best & S. 34; Fink v. Chambers. 95 Mich. 508. 55
N. W. 375; Russ Lumber & Mill Co. v. Muscupiabe Land & Water Co. (Cal.) 52
Pac. 995; Gale v. Harp (Ark.) 43 S. W. 144; J. A. Fay & Co. v. James Jenks
& Co., 93 Mich. 130, 53 N. W. 163. So, the nondelivery of property purchased,
as agreed. Mitchell v. Stinson, 80 Ind. 324. And no demand is necessary.
Booth V. Fitzer, 82 Ind. 66. Such performance is a condition precedent, Chit.
Bills, 91; Irving v. King, 4 Car. & P. 309; although the damages may be un-
certain, Lewis V. Cosgrave, 2 Taunt. 2; but if an acceptance be given for a
balance of work to be done on a contract, which is never completed beyond
the amount already paid for in cash, the failure to perform the contract is a

(888)



Ch. lo) FAILURE UNPERFORMED AGREEMENT. § 551

whether the aj^reement be one under seal, or a mere verbal agree-
ment.^*® So, where the consideration is partly an agreement to
sell goods, its nonperformance constitutes a partial failure.^ ^^ So,
an unperformed agreement to indemnify a surety by the surrender
of another note.^°^ So, an unperformed agreement for the deliv-
ery of flour on a certain day.^'- And where a note is given for
land, and is made payable on the day fixed for delivery of the deed,
the agreements are dependent one on the other, and there can be
no recovery on the note without performance of the agreement.^ ^^
Especially if the nonperformance of the agreement for a deed is ac-
companied by a sale of the land to another. ^^* So, where a note
is given to the payee for an agreement on his part to name a price
which he would give or take for an interest in land held by him
jointly with the maker, his subsequent refusal to accept the price
named by him is a failure of consideration for the note.^^° So, if
a note be given for an agreement by the payee to convey land, or
to buy it if he was not then owner and convey it, the payee's death
before performance of the contract causes a total failure of con-
sideration for the note.^^^ So, if a note be given to the payee for

partial faihire only, as though the acceptance had been for the entire con-
tract price, Trickey v. Larno. G Mees. & W. 278. And see § 4SB et seq., supra.

140 Miller v. Wood. 23 Ark. 546; Dicken v. Morgan, 54 Iowa, GS4, 7 N. W.
145; Musser v. Stauffer, 178 Pa. St. 99, 35 Atl. 709.

150 Barnes v. Stevens, 62 Ind. 226.

161 Jeffries v. Lamb, 73 Ind. 202. So, to hold one another harmless on notes
exchanged. Wolverton v. George H. Taylor & Co., 157 111. 485, 42 N. E. 49.
So, where the consideration of the note is the assignment of A.'s debts to
the payeee, and the payee has failed to deliver to the maker one of A.'s
notes held by him. Powell v. Subers, 67 Ga. 448.

i52Corwith V. Colter, 82 111. 585. But in Kelly v. Webb, 27 Tex. 368, the
holder of the note was held to be entitled to payment before delivery of the
goods. But an indorsee with notice of the contract does not take subject to
a failure to deliver goods after the indorsement to him. Ti-igg v. Saxton
(Tenn. Ch. App.) 37 S. W. 507; State Nat. Bank v. Cason, 39 La. Ann. 805, 2
South. 881.

153 Hoag V. Parr, 13 Ilun (N. Y.) 95; Cook v. Bean, 17 Ind. 504.

154 Little V. Thurston, 58 Me. 86; Ft. Payne Coal & Iron Co. v. Webster,
163 Mass. 134, 39 N. E. 786.

165 Hawks v. Truesdell, 12 Allen (Mass.) 564.
150 Tillotson V. Crapes, 4 N. H. 444.

(S89)



§ 552 CONSIDERATION FAILURE. (Ch. 15

rent of premises, of which he failed to give possession as agreed.^^^
So, if a note be given for goods with a verbal agreement to procure
the rent of a store, breach of this agreement is a failure of the
consideration of the note.^^^ So, if a note be given for a policy
of insurance, and the policy be not delivered; ^^" or for a policy
of insurance to be delivered with certain conditions, and a differ-
ent policy be tendered. And in such case, if the maker has al-
ready been obliged to pay the note to a bona fide holder, he may
have an action for the amount paid against the payee.^^**

It has been held, however, that if a note is given for a contract
of sale to be delivered, and the contract when delivered is differ-
ent from what was agreed on, this will not constitute a total fail-
ure.^ ''^ Again, if a note is given for stock to be delivered at once,
and not delivered,^ ''^ or to be issued when ready, and the corpora-
tion is never organized nor the stock issued, there is a failure of
consideration.^"^

§ 552. In like manner, the nonperformance of an agreement

to discontinue a suit is a failure of consideration of a note or in-
dorsement given therefor.^"* So, too, it has been held, the non-

15T Andrews v. Woodcock. 14 Iowa, 397.

158 Stanford v. Davis. .54 Ind. 45.

159 Lawrence v. Griswold, 30 Mich. 410.

ICO Tifft v. Insurance Co., 6 Lans. (N. Y.) 19S.

161 Boone v. Queen, 2 Cranch, C. C. 371, Fed. Cas. No. 1.643. But It seems
that, if the defects in the contract were by reason of fraudulent instructions
of the payee, the note would be void. Id. So, if the draft to be accepted
was a different draft, Sherwin v. Brigham, 39 Ohio St. 137; or the deed de-
livered was for a different piece of land from that agreed on, Glover v. Chase,
3 McCrary, 599, 11 Fed. 375.

162 Hedge v. Gibson, 5S Iowa, 65G, 12 N. W. 713.

163 Iron Worlis v. Holden, 58 Me. 146. So, if the stock was never issued
as agreed, Scotten v. Randolph, 96 Ind. 581; or if the railroad, to be built
before the note for stock matured, was not built, Jefferson v. Hewitt, 103 Cal.
624, 37 Pac. 638; or was to be running in a reasonable time, and was not
running until 14 years after, Blake v. Brown, 80 Iowa, 277, 45 N. W. 751.
But a substantial performance is sufficient. Fisher v. Briscoe, 10 Mont. 124,
25 Pac. 30; Smith v. Gillen, 52 Ark. 442, 12 S. W. 1073.

164 Bookstaver v. Jayue, 60 N. Y. 146; or to settle a charge and keep the
matter secret. Wells v. Sutton, 85 Ind. 70. So, if part of the consideration is
an agreement for definite delay in a suit, nonijerformance will be a partial
failure. HiU v. Enders, 19 111. 103.

(890)



Uh. 15) FAILURE UNPEI;F0U.MED AGliEEME.NT. § 552

performance of an agreement to return an old note on the giving
of a renewal note; ^"^ or to surrender a mortgage on giving a note
for a mortgage debt."^ So, if a note be assigned in consideration
of an agreement to pay the assignor's debts the payment of the
debts by the assignor himself causes the consideration of the note
to fail."^ So, if a note be given for services, a subsequent re-
ceipt given for the same services shows a failure of consideration
for the note.^^^ So, if an indorsement be made for an agreement,
to buy up a mortgage incumbrance, the breach of the agreement
constitutes a failure of consideration.^ ^^ So, the breach of an
agreement to indemnify the maker against partnership debts, a
judgment being subsequently rendered against both partners, and
not paid by the payee of the note.^^° So, in general, an agreement
for any service not rendered,^^^ or rendered only in part;^^^ es-
pecially if the performance is prevented by the payee himself.^^^

So, if a note is given for the purchase of a draft, with a written
agreement for a release if the draft be not collected, failure to col-
lect the draft constitutes a failure of consideration for the note.*^*
So, where a note is given under a composition agreement with cred-
itors, and indorsed for the debtor's accommodation, upon an agree-
ment that the transaction should be void unless all the creditors
signed, the failure to get the signature of all the creditors consti-
tutes a failure of consideration for the indorsement.^^^ Again, if
a note is given on a partnership settlement, with a contemporane-
ous written agreement that, if a certain partnership account was

165 Miller V. Ritz, 3 E. D. Smith (N. Y.) 25.3; Beauford v. Patterson, 63 How.
Prac. (N. Y.) 81. But not in the absence of an express agreement. Low v.
Learned, 13 Misc. Rep. 150, 34 N. Y. Supp. 68.

166 Richards v. Thomas. 1 Cromp.. M. & R. 772; or to redeem from a mort-
gage sale, Jessup v. Front, 77 Ind. 104.

167 Compton V. Jones, 65 Ind. 117.

168 Dubois V. Baker, 40 Barb. (N. Y.) 556.
leoKirkham v. Boston, 67 III. 599.

170 Pope V. Hays, 19 Tex. 375.

171 Toombs V. West, 94 Ga. 280, 21 S. E. 522; Dodge v. Oatis, 27 Kan. 762;
Perkins v. Brown (Mich.) 72 N. W. 1095.

17 2 Agnew V. Walden, 84 Ala. 502, 4 South. G72.

173 Montgomery v. Hunt, 99 Ca. 499, 27 S. E. 701.

174 Hall V. Henderson, 84 111. nil.

17 5 Doughty V. Savage, 28 Conn. 146.

(891)



§ 553 CONSIDERATION FAILURE. (Ch. 15

not paid, the maker should be credited with his share of the ac-
count, the failure to pay such account may be shown in defense
by the maker, the burden of proof in such case resting on him.^^®
Where a note held by a husband is transferred to his wife in con-
sideration of her agreement not to defend a divorce suit, the breach
of this agreement is a failure of consideration for the transfer;
and payment of the note to the husband will defeat an action sub-
sequently brought upon it by the wife."^

Nonperformance — Not a Failure of Consideration.

§ 553. It is said, however, by Prof. Parsons, that nonperform-
ance of an agreement forming the consideration of a bill or note
is no failure unless the agreement be rescinded. ^'^^ In many cases
the intention to make the agreement and the promise founded on
it independent of one another is apparent. Where an agreement
TO accept a bill of exchange has been made in consideration of an-
other agreement, the nonperformance of the latter has been held to
constitute no defense to the agreement for acceptance. ^'^® So,
where a note has been given for a college endowment, the non-
performance of a contemporaneous agreement not to diminish the
principal fund of such endowment constitutes no failure of con-
sideration for the note.^^" And where a note is given for an agree-
ment for the sale of land, to be conveyed on condition that the
note is paid, the giving up of the land by the maker, and its sale
to another person, will not prevent a recovery on the note.^^^ Nor
will the rescinding of such contract by the maker bar a recovery
on the note.^^- And, where a note is given for the purchase of

176 McSherry v. Brooks, 46 Md. 103.

177 Pearson v. Cummings, 28 Iowa, 344.

178 1 Pars. Notes & B. 203. So, Vanstrum v. Llljengren. 37 Minn. 191, 33



Online LibraryJoseph F. (Joseph Fitz) RandolphA treatise on the law of commercial paper; containing a full statement of existing American and foreign statutes, together with the text of the Commercial codes of Great Britain, France, Germany and Spain (Volume 1) → online text (page 121 of 125)